Buying an Ace Hardware franchise: SBA acquisition loan data
Since FY2018, SBA lenders have approved 111 7(a) loans to buy an existing Ace Hardware (classified mostly as Hardware Retailers), totaling $144M. The median loan was $957,500, 48% higher than the $645,250 median for all SBA-financed acquisitions. 27 of these loans were approved in the last two fiscal years.
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What this tells a buyer
- Price range to expect. Loan size tracks purchase price. Half of Ace Hardware resale loans landed between $391,000 and $1,784,000.
- Lender experience exists. Live Oak Banking Company alone has financed 29 Ace Hardware resales.
- Guaranty. The SBA guaranteed 76% of the dollars lent here.
- What the file leaves out. The SBA file does not record franchisor transfer terms or fees.
Financing an Ace Hardware resale
The median SBA 7(a) loan for an Ace Hardware resale was $957,500 across 111 loans (FY2018 to FY2026). Live Oak Banking Company, The Huntington National Bank and Northwest Bank have financed the most Ace Hardware resales. Of 51 seasoned loans (FY2018 to FY2021), 2.0% were charged off, 44% lower than the 3.5% average for all SBA acquisition loans.
Ace Hardware acquisition loans by year
| Fiscal year | Loans | Total approved | Median loan | |
|---|---|---|---|---|
| FY2018 | 6 | $5.7M | $724,250 | |
| FY2019 | 6 | $4.1M | $583,250 | |
| FY2020 | 20 | $21.6M | $752,000 | |
| FY2021 | 19 | $22.9M | $957,500 | |
| FY2022 | 19 | $19M | $766,500 | |
| FY2023 | 12 | $11.9M | $985,000 | |
| FY2024 | 2 | $1.7M | $872,550 | |
| FY2025 | 9 | $20.6M | $2,019,000 | |
| FY2026 | 18 | $36.8M | $1,422,350 |
How often do these acquisition loans fail?
Of the 51 Ace Hardware acquisition loans approved from FY2018 to FY2021 (the seasoned cohort, every loan at least about five years old), 1 have been charged off by the SBA, a rate of 2.0% by loan count and 0.5% by dollars. 23 have already been paid in full.
For comparison, the charge-off rate across all SBA 7(a) acquisition loans in the same cohort is 3.5%, so Ace Hardware is 44% lower than the acquisition-loan average. Non-acquisition 7(a) loans (every other stated purpose) approved FY2018 to FY2021 charged off at 6.2%.
"Charged off" is the SBA's final loss action on a defaulted loan after collection efforts. It lags default by a year or more, which is why only older cohorts are measured. It is not the same as a delinquency rate, and loans still outstanding can still fail. See charge-off in the glossary.
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Lenders financing Ace Hardware resales
| # | Lender | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Live Oak Banking Company | 29 | 26.1% | $49.5M | |
| 2 | The Huntington National Bank | 5 | 4.5% | $3.7M | |
| 3 | Northwest Bank | 4 | 3.6% | $5.4M | |
| 4 | Byline Bank | 3 | 2.7% | $6.7M | |
| 5 | Old National Bank | 3 | 2.7% | $3M | |
| 6 | Columbia Bank | 3 | 2.7% | $2.2M | |
| 7 | Pinnacle Bank | 3 | 2.7% | $1.9M | |
| 8 | Nicolet National Bank | 3 | 2.7% | $1.1M | |
| 9 | BankVista | 2 | 1.8% | $4.4M | |
| 10 | First Interstate Bank | 2 | 1.8% | $4M |
States where Ace Hardware units are bought
| # | State | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | California | 9 | 8.1% | $9.4M | |
| 2 | Georgia | 7 | 6.3% | $8.5M | |
| 3 | Wisconsin | 7 | 6.3% | $7.9M | |
| 4 | Colorado | 7 | 6.3% | $7.2M | |
| 5 | Ohio | 7 | 6.3% | $5.5M | |
| 6 | Texas | 6 | 5.4% | $10.3M | |
| 7 | Oregon | 6 | 5.4% | $8.8M | |
| 8 | Washington | 6 | 5.4% | $8.3M | |
| 9 | Michigan | 6 | 5.4% | $7.6M | |
| 10 | Indiana | 6 | 5.4% | $4.9M |
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How lenders classify Ace Hardware
Lenders code each loan to a NAICS industry. For Ace Hardware the codes used were:
| # | Industry | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Hardware Retailers | 106 | 95.5% | $140M | |
| 2 | Home Centers | 3 | 2.7% | $2.1M | |
| 3 | Automotive Parts and Accessories Retailers | 1 | 0.9% | $1.6M |
Questions buyers ask
How much do buyers borrow to buy an Ace Hardware franchise?
The median SBA 7(a) loan for an Ace Hardware resale was $957,500 across 111 loans (FY2018 to FY2026). The middle half of loans ran from $391,000 to $1,784,000. The loan excludes the buyer's equity and any seller note and may include working capital, so the price is usually higher than the loan.
Which banks finance Ace Hardware acquisitions?
Live Oak Banking Company has made the most SBA acquisition loans for Ace Hardware (29, 26% of the total). The Huntington National Bank, Northwest Bank, Byline Bank follow.
What interest rate and term do Ace Hardware acquisition loans carry?
The average initial rate at approval was 6.56% (a blend of fixed and variable loans across several rate environments, so treat it as context, not a quote). The median term was 10 years.
Is an Ace Hardware resale riskier than other SBA-financed acquisitions?
In the seasoned cohort (FY2018 to FY2021), 2.0% charged off, 44% lower than the 3.5% average for all SBA acquisition loans.
Where are Ace Hardware units being bought with SBA loans?
California (9), Georgia (7), Wisconsin (7), Colorado (7), Ohio (7). State counts follow where the brand has units and where SBA lending is most active generally; see the state pages for the overall picture.
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Related
- All Hardware Retailers acquisitions
- California acquisitions
- Georgia acquisitions
- Wisconsin acquisitions
- Live Oak Banking Company
- The Huntington National Bank
- Northwest Bank
- All franchise brands
Brand name as recorded by lenders in the SBA file: "Ace Hardware" (franchise code S0067). Figures are aggregates of public SBA data and are not provided or endorsed by the franchisor.